Plan to raise budgetary allocation for food

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Shakhawat Hossain
The government has decided to increase substantial funding for 'food subsidy' and 'food-for-work' programmes in the wake of escalating food prices in the local and international market, officials said Saturday.
The government allocated Tk 21.54 billion in the current budget for direct food subsidy and food-based works, but midway through the fiscal the allocation was found to be 'insufficient' because of the sky-rocketing food prices, a ministry of finance official said.
"Food prices have increased abnormally in the local and international markets, making it very difficult to run the expenses with the existing budgetary allocation," the official said.
A finance ministry meeting headed by secretary Mohammad Tareque reviewed budgetary food expenses last week and decided to increase funding after coming up with a revised figure by Wednesday, he added.
The decision was taken as the price of rice hit an all time high last week amid reports that the rice harvest of Aman season fell far short of target due to floods in July-September and the cyclone in November.
The agriculture ministry said rice worth around US $ 600 million has been lost in the two natural disasters.
Rice was selling between Tk 30- Tk 50 per kilogram, a growth of 60-70 per cent in a year in the local market. Last week alone rice prices soared by an average 20 per cent at the retail level.
In the international market, price of rice shot up more than 70 per cent in 2007 to around $350 dollars per tonne, driven by poor harvests in the major rice producing countries.
Experts said rice prices escalated in the local market in recent weeks as the millers and wholesalers speculated on poor harvest and insufficient buffer stock by the government.
Because of the high prices of food grains, the government could maintain only 0.60 million tonnes of buffer stock, which is 40 per cent less than the targeted figure.